Petrol prices are set to rise by up to 7c per litre before Christmas
PETROL prices are set to jump up to 7c/l before Christmas after oil rich OPEC countries agreed to cut production by 1.2 million barrels a day.
- Petrol prices fall in five biggest cities
- SA motorists are the nation’s most price sensitive to fuel prices
PETROL prices are set to jump up to 7c/l before Christmas after oil rich OPEC countries agreed to cut production by 1.2 million barrels a day.
That’s the warning to Adelaide motorists as they enjoy the cheapest petrol prices in the nation, with ULP selling around $1 a litre at many outlets.
RAA senior analyst Chris West said wholesale prices could be driven up between 5c and 7c per litre as a result of OPEC’s decision overnight to cut oil production.
He said increases in oil prices driven by speculation of the production cut – from January 1 – could flow on to bowser prices in the next fortnight.
“I believe there will be up to 7c/l increase per litre on wholesale costs and, given Australian dollar exchange rates and refinery margins don’t change, they could flow through to pump prices in the next two weeks,’’ he said.
“This too depends on OPEC members being disciplined and meeting the production targets, which they haven’t in the past.’’
AMP economist Shane Oliver said he expected similar pump price increases in the same period and shared the doubt OPEC countries will deliver on their promises.
“They had all ramped up production because they expected they would decide to cut it,’’ he said.
“The upside is any oil price increase would be limited because shale oil produced in the US becomes competitive around $US50 a barrel, which is where the current price is.
“And it’s worth noting the oil price is still relatively cheap, given two years ago it was around $US100 a barrel.’’
Mr West has urged motorists to keep topping up with petrol at its present cheap price in anticipation of a looming price hike.
Adelaide’s average ULP price was 105c/l today, with some outlets as low as 96.5c/l, while the wholesale cost was 110c/l.
The last time prices spiked at the pump they jumped to 134.9c/l.